“The first crucial factor” explaining the shift in the administration’s stance on Saudi Arabia “is the price of oil and the price of gasoline,” said Gregory Brew, an analyst with Eurasia Group’s Energy, Climate & Resources team. “The Biden Administration woke up to this issue last year during the energy crisis, and that was a major compelling factor in getting the White House to change its tune on Saudi Arabia.”
While the U.S. is the world’s largest oil producer, its government has very little ability to control production. Saudi Arabia, meanwhile, is the world’s largest oil exporter, and has more leeway to toggle production both on its own (via state-owned Aramco) and as the most influential member of the Organization of Petroleum Exporting Countries, OPEC.
The U.S’s push for the mega-deal between Saudi Arabia and Israel is animated much less by petro politics than a larger set of geopolitical concerns: limiting Chinese influence in the region, containing Iran and providing security guarantees for Israel. Even so, domestic worries about keeping prices down at the pump have been a factor in the negotiations. Late last month, White House officials visiting Saudi Arabia emphasized that it’d be difficult to secure a deal amid higher-than-usual gas prices in the U.S., often blamed on the kingdom’s recent decisions to limit oil output. Reports emerged last Friday that the kingdom was prepared to raise oil output in the event of high prices as a sign of goodwill toward Washington. Hours later, Hamas militants broke through the border between the Gaza strip and Southern Israel.